[Federal Register: May 2, 1997 (Volume 62, Number 85)]
[Rules and Regulations]
[Page 24026-24034]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02my97-15]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Parts 1, 15, 16 and 17
Recordkeeping; Reports by Futures Commission Merchants, Clearing
Members, Foreign Brokers, and Large Traders
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule.
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SUMMARY: The Commodity Futures Trading Commission (Commission) is
amending its regulations to require that futures commission merchants,
clearing members and foreign brokers (firms) file options large trader
reports with the Commission on a daily basis. The amendments specify a
joint options and futures reporting level, a new record format for
reporting information in machine-readable form, an earlier time for
submission of the data, and a requirement that corrections to
previously transmitted data be provided in machine-readable form. The
rule amendments more closely align the Commission's reporting rules
with those of the exchange and may allow some exchanges to obtain data
from the Commission rather than from reporting firms. The proposed
amendments deleting from requirement that exchanges file weekly options
large trader reports will be made effective after all firms are
providing the required reports daily.
The collection of daily options large trader data cannot begin
until the Commission has reengineered its data collection system. Since
the Commission anticipates completion of the necessary changes by
September 1997, it is setting the effective date for the amendments as
October 1, 1997. The Commission believes that, by publishing final
rules at this time, firms will have ample lead time to make changes to
their internal procedures and computer software so that joint testing
of Commission and firms software may begin on or shortly after October
1, 1997. Since this testing may take a period of time to complete, the
Commission will take no enforcement action during the testing period
against
[[Page 24027]]
reporting firms if they are not in compliance with the new requirements
provided that firms are making a good faith effort to comply and
continue in compliance with the reporting rules in effect immediately
prior to the adoption of these rules. If the Commission cannot meet its
schedule for software development, it may at a later date delay
implementation of these rules.
EFFECTIVE DATE: October 1, 1997.
FOR FURTHER INFORMATION CONTACT: Lamont L. Reese, Commodity Futures
Trading Commission, Division of Economic Analysis, Three Lafayette
Centre, 1155 21st Street, NW., Washington, DC 20581, telephone (202)
418-5310 or E-mail 1reese@cftc.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Commission employs a comprehensive market surveillance system
which includes an exclusive data-gathering system relying heavily on
computer support. Regulations concerning this system require reports
from three primary sources: contract markets under Part 16 of the
regulations; future commission merchants (FCMs), clearing members, and
foreign brokers (firms) under parts 17 and 21 of the regulations; and
individual traders under Parts 18 and 19 of the regulations. See 17 CFR
Parts 16 through 21 (1996).
Part 17 of the Commission's regulations requires that firms submit
a daily report to the Commission with respect to futures positions in
all special accounts on their books.\1\ The regulations also specify
the format for data that is reported on machine-readable media and the
type of data processing media that is compatible with Commission
computer systems.\2\ Additionally, firms must file a CFTC form 102
showing the identifying information specified under Section 17.01 of
the regulations for each special account, 17 CFR 17.01 (1996). With
respect to exchange-traded options, the Commission receives large
trader data only on a weekly basis. Part 16 of the regulations requires
that contract markets provide the long and short put or call positions
for each options trader controlling a reportable position as of the
close of business on Tuesday.\3\
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\1\ Special account means any commodity futures or options
account in which there is a reportable position, 17 CFR 15.00
(1996). Firms report futures information to the Commission and
futures and options information to the exchanges. A reportable
position in any open position held or controlled by a trader at the
close of business in any one futures contract of a commodity traded
on any one contract market that is equal to or in excess of the
quantities fixed by the Commission in Sec. 15.03 of the regulations,
17 CFR 15.03 (1996).
\2\ See rule 17.00(g) for a description of the file
characteristics and rule 15.00(1) for a definition of compatible
data processing media, 17 CFR 15.00(1) and 17.00(g) (1996).
\3\ See 17 CFR 16.02 (1996). A reportable options position is
defined as any open contract position on any one contract market in
the put options or separately in the call options of a specified
option expiration date which exceeds 50 contracts, 17 CFR
15.00(b)(2) (1996).
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Due to the importance of knowing both a trader's open futures and
options positions for general and financial surveillance, the
Commission proposed rule changes that would require firms to report
large trader futures and options positions to the Commission on a daily
basis, 61 FR 37409 (July 18, 1996). The proposed amendments included
redefining reporting levels, establishing joint reporting of futures
and options, changing the current format for reporting data on machine-
readable media, and revising the time by which data must be supplied by
reporting firms. A number of these rule amendments were intended more
closely to align the Commission's and the exchanges' reporting rules,
allowing the potential for the Commission to act as a central
collection point for large trader data and distribute such data to the
exchanges.\4\ The Commission also requested comment on matters
regarding electronic transmission of data, computerizing its account
identification form, and related rule amendments concerning exchange
reporting of delta factors and settlement prices.
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\4\ As explained in the Federal Register release, firms
currently report futures and options data to the exchanges and
futures data to the Commission. Using the Commission as a single
collection point for large trader data was suggested by reporting
firms through operations committees of the Futures Industry
Association (FIA) as a means to reduce reporting burdens in the
industry, 61 FR 37410 (July 18, 1996).
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In addition to the above, the Commission proposed amendments to
Parts 18 and 19 of the regulations concerning reports filed by large
traders which were unrelated to options large trader reporting. The
amendments proposed to Part 18 required that traders who have
reportable futures or options positions file a CFTC form 40,
"Statement of Reporting Trader," only in response to a special
call.\5\ The amendments proposed to Part 19 required that traders file
cash position reports based on a trader's net futures and option
positions. Currently, reporting levels for the cash position reports
are based only on a trader's futures positions. The Commission has
adopted these amendments in a separate rulemaking.\6\
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\5\ Under Part 18 of the regulations, traders who become
reportable in futures must file a CFTC form 40, "Statement of
Reporting Trader," within ten business days following the day that
the trader obtains a reportable position. Additional filings are
made annually as specified in rule 18.04(d).
\6\ See 62 FR 6112 February 11, 1997.
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II. Discussion of Comments and Final Rules
The Commission received eight comment letters concerning its notice
of proposed rulemaking relating to daily option large trader reports.
Commenting were the FIA, five exchanges, an FCM, and a service bureau
that provides back-office support to reporting firms. In addition,
Commission staff met with exchange representatives and attended a
meeting of the FIA's operations committee to answer questions about the
rule amendment.
A. General Considerations.
Commentors agreed that the Commission needs daily futures and
options large trader positions for effective market surveillance and
that such data should be reported by firms directly to the Commission
rather than the Commission's obtaining the data from the exchanges. In
view of this, the Commission has determined to obtain futures and
options position data directly from the firms. The Commission also
proposed amendments to Part 16 of its regulations that delete the
requirement that exchanges provide such data. As explained more fully
below, the Commission will adopt as final the amendments to Part 16
after it begins receiving option large trader data from the firms.
Commentors also supported adoption of uniform reporting rules by
the exchanges and the Commission. Generally, they believed that such
actions would reduce reporting burdens for most firms by eliminating
the maintenance costs for the many systems that are currently in place.
In commenting on this, the FIA opined that, "although cost savings to
FIA member firms are difficult to quantify with any precision, FIA has
no doubt that such savings are real and, over time, will be
significant."
There were, however, significant concerns about the Commission's
acting as a central depository for large trader data and distributing
such data to the exchanges. These concerns centered around time frames
for receipt of the data, control over the process of receiving such
data, and accountability of reporting firms to the Commission and the
exchanges. Commentors questioned whether the Commission could supply
data in accordance with current exchange requirements or on government
holidays when the
[[Page 24028]]
exchanges are open. Additionally, they were concerned whether there
would be sufficient backup procedures to ensure that data could be
supplied to the exchanges in the event of computer problems or
communication failures at the firms or the Commission. One commentor
noted that cost savings envisioned by this proposal may not materialize
if the exchanges must maintain backup procedures with their clearing
members.
Although Commission staff will address many of these issues in the
course of developing the Commission's surveillance system, the issues
may not be resolved to the satisfaction of every exchange.
Nevertheless, reporting burdens on the industry can be reduced, as
commentors suggested, if the Commission and the exchanges adopt uniform
formats for transmitting and uniform rules for reporting large trader
data. In this respect, the proposed rules for determining reportability
and for reporting appear to be consistent with or satisfactory for use
in exchange reporting systems.\7\ Similarly, the reporting format
proposed by the Commission, with the exception of minor technical
amendments discussed below, appears suitable for all exchange reporting
systems, and a number of exchanges have stated they plan to adopt it.
The Commission believes that significant cost savings and efficiencies
can be achieved by reporting firms if all exchanges adopt a common
format for reviewing large trader position data. Accordingly, the
Commission encourages all exchanges to adopt the format specified in
these regulations even if they ultimately choose not to receive their
large trader position data from the Commission.\8\
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\7\ These rules include proposed amendments to Part 15 that
define a reportable position and proposed amendments to Part 17 that
require reporting of all futures and options positions if a trader
becomes reportable. The Commission did not propose rule amendments
that would adjust its reporting levels to those set by the
exchanges. Reporting firms can obtain uniformity in this respect by
submitting data at the lower of either the exchanges' or the
Commission's reporting level. Although the Commission will retain
only the data it requires for its purposes, it will have the
capability to transmit to an exchange all data pertaining to that
exchange that the Commission receives.
\8\ Other avenues to reduce reporting burdens will be
investigated as well. One commentor suggested, for example, that
firms may reduce costs if they can use software already developed
sequentially to transmit the same data to different locations.
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B. Proposed Formats and Reporting
Three persons commented on the Commission's proposed amendments to
its format for reporting data on machine-readable media. One of the
commentors requested that the Commission add a one-character field to
designate whether a record submitted by a reporting firm either changed
or deleted a previously-transmitted record or represented a new record.
The Commission has changed its proposed format in accordance with this
request.\9\ Another commentor requested that the Commission retain its
five-digit designation for reporting firms and its six-digit
designation for contract markets. The Commission proposed that firms
and contract markets be identified by using exchange-assigned
designators. This commentor believed that such a change may minimize
programming costs since all firms have programmed Commission codes into
their existing systems. This argument is not persuasive. Reporting
firms must also program exchange codes in their systems, not only for
reporting to the exchanges, but also for clearing transactions. Using
Commission-generated codes would require that all exchanges and all
firms keep and periodically update tables for Commission codes as well
as those assigned by the exchanges. It appears that the reporting
burden on the industry is reduced if only exchange codes are used. In
addition to the above, the Commission's Office of Information Resources
Management has determined there is no need for the Type I record
described in proposed regulation 17.00(g)(2)(i). The Commission is
therefore amending its proposal to exclude the requirement to submit
this record. No suggestions were made for changes to the Commission's
proposed amendments to rule 15.00 that define a reportable position or
to the proposed amendments to rule 17.00(a) that define the information
that must be reported. The Commission therefore is adopting the
amendments to rules 15.00 and 17.00(a) as proposed and the amendments
to rule 17.00(g) as discussed above.
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\9\ Use of this field is described more fully below in the
discussion on correcting errors.
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C. Transmission of Data
The Commission requested comment on the potential burden to small
firms if all large trader data were required to be reported on machine-
readable media. As explained in its notice of proposed rulemaking, a
significant number of firms file paper reports. Although the amount of
data filed in this form currently is small, this may increase
appreciably when the Commission collects option large trader data. Two
persons commented on this aspect of the Commission's proposed
rulemaking. Both expressed the opinion that no exceptions to electronic
reporting be allowed since key entry of paper reports impedes timely
access to large trader positions.
Currently, regulation 17.00 requires all firms to file
electronically except as otherwise authorized by the Commission or its
designee. Previously, exemptions from this requirement were liberally
granted because of the relatively high cost for computer hardware and
software needed to transmit small amounts of data. Recently, lower
costs have made personal computers (PCs) equipped with fax/modems more
commonplace for business applications. In this respect, Commission
staff are developing a PC based software application that will
facilitate data entry for large trader positions. Staff will be
contacting firms that currently file manual reports to determine costs
a firm may incur to transmit data using a PC and will offer the data
entry software free of charge. In light of their findings,
determinations will be made on a case-by-case basis whether to require
electronic filing.
The Commission also sought comment on how best to define acceptable
data processing media. Commission-compatible data processing media is
currently defined in rule 15.00(1), but is somewhat outdated. Three
persons provided suggestions on this matter. Two of the commentors
recommended specific but differing forms of data transmission. The FIA
questioned whether it was practical to define this term by regulation
since electronic media are evolving at such a rapid pace. The
Commission agrees that flexibility is required in this area. Currently,
authority is delegated to the Executive Director to approve the use of
data processing media other than that specified in rule 15.00(1). See
17 CFR 16.07(b) and 17.03(c) (1996). In view of the above, the
Commission sees no value in citing specific media as acceptable. The
Commission is amending rule 15.00(1) to delete its list of specific
media and to define Commission-compatible data processing media to mean
media approved by the Commission or its designee. The Executive
Director will continue to have delegated authority to define acceptable
media.\10\
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\10\ This delegation of authority is being set forth in revised
rule 15.00(1), and conforming amendments are being made to rules
1.31, 16.07(b) and 17.03(c). With the exception of 8 inch magnetic
discs, the Commission will continue to accept data on media as
currently defined in rule 15.00. No data currently are provided on 8
inch magnetic discs. The Commission will support submission of data
on diskettes generated by personal computers and on certain tape
cartridges.
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[[Page 24029]]
D. Correction of Errors
The Commission did not address the issue of error correction in its
notice of proposed rulemaking. Commission rule 17.00(h) requires that
errors and omissions be filed on hard copy forms or computer printouts.
One person in commenting requested that dial-up screens and procedures
be made available for adjustments to previous transmissions, noting
that overlaying previously reported data is costly and time consuming.
This commentor noted that corrections are problematic with respect to
data for one exchange in particular since the firm's accounting system
cannot handle the exchange's timetable for processing data on those
weekends that options expire.
Generally, the Commission receives few, if any, corrections to
position data resulting from adjustments for deliveries or option
expirations that occur over a weekend. The Commission expects that such
adjustments will be reflected in changes to traders' positions as of
the close of business on the next business day. Similarly, the
Commission expects that changes to open interest resulting from such
adjustments will be reflected in the open interest published for the
next business day. Adjusting positions otherwise may be unique to a
particular exchange.
As noted above, the Commission is designating a field in its
reporting format that may be used by firms to specify certain records
they submit as changes or deletions to previously transmitted records.
Rule 17.00(h) must also be amended if corrections are to be made on
machine-readable media. In order to limit the number of paper reports
filed by firms, the Commission is amending rule 17.00(h) to require
that corrections to previously filed reports be submitted in machine-
readable form using the format specified in rule 17.00(g) unless
otherwise authorized by the Commission or its designee.\11\ The amended
rule 17.00(h) requires that, when deleting a record, firms supply all
information contained on the previously submitted record with a "D"
in the eightieth column. When changing a record, firms must supply the
information that changed as well as all other information on the record
that was previously submitted either leaving the eightieth column blank
or inserting a "C". Commission staff will consider the need for
additional means to correct errors in its dealings with individual
exchanges on issues related to providing them with large trader data.
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\11\ As with the information provided under rule 17.00(a), the
Commission is delegating authority to the Director of the Division
of Economic Analysis to determine if firms will be allowed to report
data under rule 17.00(h) on hard copy forms or printouts. Rule 17.03
is being amended to effect this delegation.
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E. Electronic Transmission of Account Identification Information
Commission regulations require that firms identify all special
accounts on a CFTC form 102. Under current regulations, initial
identifying information must be provided on call by the Commission when
the account is first reported, and a completed form 102 must then be
filed within three business days. See 61 FR 6310 (February 20, 1996).
The Commission recognized in its notice of proposed rulemaking that
supplying this information was burdensome since firms must submit this
form to multiple regulators for each special account they report. The
Commission noted, however, that two exchanges, the Chicago Board of
Trade (CBT) and the Chicago Mercantile Exchange, have or are in the
process of providing means for electronic transmission of this
information. The Commission requested comment on either of the
exchanges' approach or other viable alternatives that might reduce
burdens associated with reporting this information. Two persons,
including the CBT, submitted comments concerning this matter.
The CBT recommended that the Commission's proposed record format be
altered to include the name, address and type of newly reported
accounts. This is similar to the CBT's current system for account
identification wherein reporting firms provide partial account
identification information on two records which are transmitted
electronically. The CBT offered access to its personal information
program that insures the receipt of appropriate data suggesting this
could be used as an interim system until programs for submissions of
electronic form 102s are fully operational. Adoption of a system
similar to that of the CBT would save processing costs for the
Commission since it now receives similar limited information by
telephone or facsimile and key-enters the data. Commission staff will
more fully investigate the operation of the CBT's system. The
Commission, however, will consider changes to its regulations for
obtaining account identification information only after it begins
collecting daily option large trader data.
E. Time and Place for Filing Reports
The Commission proposed amending rule 17.02 to require that firms
file large trader position reports earlier than is currently required.
In proposing this amendment, the Commission noted that exchanges
currently impose an earlier filing time than the Commission and that
the Commission's market surveillance program would benefit if the
reports were received earlier. To align its reporting rules more
closely with those of the exchanges, the Commission proposed that all
large trader reports be submitted by 9:00 a.m. or at such earlier time
as specified by an exchange that is receiving data from the Commission
for contract markets on that exchange.\12\
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\12\ Times refer to eastern times for markets located in that
time zone and central time for all other markets.
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Several exchanges commented about time frames for filing large
trader reports, expressing concern that, if the Commission acts as a
central depository, they continue to receive large trader data in a
timely fashion. In meetings with Commission staff, members of the FIA
questioned whether it was appropriate to make it a violation of
Commission regulations if firms did not submit reports within earlier
deadlines set by exchanges.
Many issues remain if the Commission is to distribute large trader
data to the exchanges. Whether the Commission can supply data in the
time frame required by any particular exchange can only be answered
after the Commission begins testing data transfers. At that time the
Commission and the exchanges can jointly determine procedures that may
be necessary to ensure the timeliness of large trader data. In view of
this, the Commission is amending its proposal to require only that data
be supplied to the Commission by 9:00 a.m. Since there were no
objections to this 9:00 a.m. filing time, the Commission is adopting
its proposal as amended. This rule does not preclude exchanges'
requiring their members to submit large trader data to the Commission
earlier so they may, in turn, receive it earlier from the Commission.
The Commission anticipates that assuring the timeliness and
completeness of large trader reporting by exchange members will be a
shared Commission/exchange responsibility if exchanges determine to
receive data from the Commission.
In addition to specifying the time that reports must be filed, Rule
17.02 specifies the location where various electronic media can be
routinely filed. Currently, rule 17.02 allows data to be submitted via
dial-up transmission only at the Chicago Regional Office, data to be
submitted via magnetic tape at either the New York or Chicago Regional
Office and data to be submitted by magnetic diskette at the Kansas
City,
[[Page 24030]]
Chicago, or New York Regional Office. Hardware to support these
functions must be purchased, maintained and operated at the appropriate
locations. In this respect, the Commission must purchase new tape
readers as part of its reengineering project.
At the current time, no exchanges or firms routinely submit data on
magnetic tape at the New York Regional Office. In view of the costs
involved, the Commission has determined that it will not purchase a new
tape reader to allow routine submissions of large trader data on
magnetic tape (reel or cartridge) at its New York Regional Office.
Back-up facilities will be maintained in this office for such media in
the event that firms or exchanges cannot transmit data. The Commission
is amended Rule 17.02 to reflect this determination.
The Commission has determined that the Administrative Procedure
Act, 5 U.S.C. 553(b)(1994), does not require notice of proposed
rulemaking and an opportunity for public participation in connection
with the adoption of this amendment. In this regard, the Commission
notes that such notice and opportunity for comment is unnecessary
because this rule amendment relates solely to agency procedure or
practice, does not establish any new obligations under the Commodity
Exchange Act and does not affect the current reporting by any firm.
Moreover, the expenditure of funds to support an unused method of
reporting would appear to be contrary to the public interest. In any
event, the Commission will have equipment available for non-routine
processing of magnetic tape.
Although this rule amendment is being promulgated as a final rule,
the Commission nevertheless will consider comments from interested
persons concerning this amendment within 60 days of publication in the
Federal Register. Comments should be mailed to the Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW.,
Washington, D.C. 20581, attention: Office of the Secretariat or send
via E-mail to secretary@cftc.gov and should make reference to
"Option Large Trader Reports".
F. Other Exchange Reporting
The Commission proposed amendments to rules 16.00 and 16.01 under
which exchanges make reports concerning clearing member activity and
provide market statistics. See 17 CFR 16.00 and 16.01 (1996). The
proposed amendments require that exchanges provide option and futures
market settlement prices and option delta factors by 7:00 a.m. on the
business day following the report date for the data.\13\ Currently, the
data are not provided until 3:00 p.m. of the day following the report
day. The Commission also proposed to delete the requirement that
exchanges provide the number of options exercised and assigned and the
number expiring unexercised. Last, the Commission proposed that the
current practice of the exchanges in providing information concerning
first notice day and last trading day for futures contracts and
expiration date for options contracts be set forth as a requirement
under rule 16.01. There were no objections to adoption of these
proposals. In view of this, the Commission is adopting the amendments
to rules 16.00 and 16.01 as proposed.
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\13\ The report date is the business day to which the data
pertains.
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G. Implementation Schedule
As noted above, the Commission is in the process of obtaining new
hardware and reengineering its market surveillance software to
accommodate the receipt and processing of daily option large trader
data. This involves a lengthy time period during which internal
software requirements will be defined and the software developed and
tested. It is only after these tasks are completed that the Commission
can begin receiving data from firms on a routine basis. Since the
Commission expects that its software development and internal testing
will be completed by the end of September 1997, it is setting an
effective date of October 1, 1997, for these rules. However, at this
time the Commission cannot be certain of this timetable for completion.
For this reason, the Commission may at a later date delay
implementation of these rules.
Reporting firms must also develop software for the new format
specified in Part 17. Such software and the Commission's software must
be jointly tested to ensure that data can be received and processed.
Since joint testing may not begin until after the effective date of
these rules and since firms must be dealt with on an individual basis,
this process will require some period of time beyond October 1, 1997,
before all firms are in compliance with the new rules. In view of this,
until the testing is complete, the Commission will take no enforcement
action against a firm if it is not in compliance with the new rules by
October 1, 1997, provided that the firm is making a good faith effort
to comply with the new rules and, until testing is completed, continues
in compliance with the reporting rules in effect immediately prior to
the adoption of these new rules.
During this period of testing, the Commission will continue to
receive weekly option large trader reports from the exchanges. After
the Commission is receiving all daily option large trader reports from
firms, it will undertake a final rule making concerning its proposed
amendments to Part 16 that delete the requirement that exchanges
provide such data. Since firms may be providing daily options large
trader data for an exchange or all exchanges prior to the effective
data of the amendments to Part 16, the Commission will take no
enforcement action against an exchange for not providing weekly option
large trader date if it makes a finding that firms are providing such
data for contract markets on the exchange. The Commission is delegating
to the Director of the Division of Economic Analysis the authority to
make the necessary findings and determinations concerning reporting by
firms.
III. Other Related Matters
A. The Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) 5 U.S.C. 601 et seq., requires
that agencies consider the impact of these rules on small businesses.
The Commission has previously determined that large traders and futures
commission merchants are not "small entities" for purposes of the
Regulatory Flexibility Act, 47 FR 18618-18621 (April 30, 1982).
Therefore, the Chairperson, on behalf of the Commission, hereby
certifies, pursuant to 5. U.S.C. 605(b), that the action taken herein
will not have a significant economic impact on a substantial number of
small entities.
B. Paperwork Reduction Act (PRA)
When publishing final rules, the Paperwork Reduction Act of 1995
(Pub. L. 104-13 (May 13, 1995)) imposes certain requirements on federal
agencies (including the Commission) in connection with their conducting
or sponsoring any collection of information as defined by the Paperwork
Reduction Act. In compliance with the Act, these final rules and/or
their associated information collection requirements inform the public
of:
"(1) the reasons the information is planned to be and/or has
been collected; (2) the way such information is planned to be and/or
has been used to further the proper performance of the functions of
the agency; (3) and estimate, to the extent practicable, of the
average burden of the collection (together with a request that the
public direct to the
[[Page 24031]]
agency any suggestions for reducing this burden); (4) whether
responses to the collection of information are voluntary, required
to obtain or retain a benefit, or mandatory; (5) the nature and
extent of confidentiality to be provided, if any; and (6) the fact
that an agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it
displays a currently valid OMB control number."
The Commission previously submitted these rules in proposed form
and their associated information collection requirements to the Office
of Management and Budget. The Office of Management and Budget approved
the collection of information associated with these rules on November
26, 1996, and assigned OMB control number 3038-0009 to the rules. The
burden associated with the entire collection, including these final
rules, is as follows:
Average burden hours per response: 0.3607.
Number of Respondents: 6181.
Frequency of response: Daily.
The burden associated with these specific final rules, is as
follows:
Average burden hours per response: .3264.
Number of Respondents: 585.
Frequency of response: Daily.
Persons wishing to comment on the information required by these
final rules should contact the Desk Officer, CFTC, Office of Management
and Budget, Room 10202, NEOB, Washington, DC 20503, (202) 395-7340.
Copies of the information collection submission to OMB are available
from the CFTC Clearance Officer, 1155 21st Street, NW, Washington, DC
20581, (202) 418-5160.
List of Subjects
17 CFR Part 1
Reporting and recordkeeping requirements.
17 CFR Part 15
Brokers, Reporting and recordkeeping requirements.
17 CFR Part 16
Commodity futures, Reporting and recordkeeping requirements.
17 CFR Part 17
Brokers, Commodity futures, Reporting and recordkeeping
requirements.
In consideration of the foregoing, and pursuant to the authority
contained in the Commodity Exchange Act (Act) and, in particular,
sections 4g, 4i, 5 and 8a of the Act, 7 U.S.C. 6g, 6i, 7 and 12a
(1994), the Commission hereby amends chapter I of title 17 of the Code
of Federal Regulations as follows:
PART 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT
1. The authority citation for part 1 continues to read as follows:
Authority: 7 U.S.C. 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6f, 68, 6h,
6i, 6k, 6l, 6m, 6n, 6o, 7, 7a, 7b, 8, 9, 12, 12a, 13a, 13a-1, 16,
16a, 19, 21, and 24, unless otherwise noted.
2. Section 1.31 is amended by revising paragraphs (c)(1)(iii) and
(c)(3) to read as follows:
Sec. 1.31 Books and records; keeping and inspection.
* * * * *
(c) * * *
(1) * * *
(iii) If the records are preserved on optical disk, facilities for
immediately producing complete, accurate and easily readable hard
copies of the records and the means to provide, immediately upon
request, any Commission or Department of Justice representative with
copies of the records on Commission compatible machine-readable media
as defined in Sec. 15.00(l)(1) of this chapter.
* * * * *
(3) Be ready at all times to provide, and immediately provide at
the expense of the person required to keep such records, any hard copy
or facsimile enlargement of such records, and for records stored on
optical disk, copies of such records on approved machine-readable media
as defined in Sec. 15.00(l)(1) of this chapter which any representative
of the Commission or U.S. Department of Justice may request. Records on
machine-readable media must use a format and coding structure specified
in the request; and
* * * * *
PART 15--REPORTS--GENERAL PROVISIONS
3. The authority citation for part 15 continues to read as follows:
Authority: 7 U.S.C. 2, 4, 5, 6a, 6c(a)--(d), 6f, 6g, 6i, 6k, 6m,
6n, 7, 9, 12a, 19 and 21; 5 U.S.C. 552 and 552(b).
4. Section 15.00 is amended by revising paragraphs (b) and (1) to
read as follows:
Sec. 15.00 Definitions of terms used in parts 15 to 21 of this
chapter.
* * * * *
(b) Reportable position means:
(1) For reports specified in Parts 17, 18 and Sec. 19.00(a)(2) and
(a)(3) of this chapter any open contract position that at the close of
the market on any business day equals or exceeds the quantity specified
in Sec. 15.03 of this part in either:
(i) Any one future of any commodity on any one contract market,
excluding future contracts against which notices of delivery have been
stopped by a trader or issued by the clearing organization of a
contract market; or
(ii) Long or short put or call options that exercise into the same
future of any commodity on any one contract market.
(2) For the purposes of reports specified in Sec. 19.00(a)(1) of
this chapter, any combined futures and futures-equivalent option open
contract position as defined in part 150 of this chapter in any one
month or in all months combined, either net long or net short in any
commodity on any one contract market, excluding futures positions
against which notices of delivery have been stopped by a trader or
issued by the clearing organization of a contract market, which at the
close of the market on the last business day of the week exceeds the
net quantity limit in spot, single or in all-months fixed in Sec. 150.2
of this chapter for the particular commodity and contract market.
* * * * *
(1) Compatible data processing media. This term means data
processing media approved by the Commission or its designee. The
Commission hereby delegates, until the Commission orders other-wise,
the authority to approve data processing media for data submissions to
the Executive Director to be exercised by such Director or by such
other employee or employees of such Director as designated from time to
time by the Director. The Executive Director may submit to the
Commission for its consideration any matter which has been delegated in
this paragraph. Nothing in this paragraph prohibits the Commission, at
its election, from exercising the authority delegated in this
paragraph.
PARTS 16--REPORTS BY CONTRACT MARKETS
5. The authority citation for part 16 continues to read as follows:
Authority: 7 U.S.C. 6a, 6c, 6g, 6i, 7 and 12A.
6. Section 16.00 is amended by revising paragraph (a)(5) to read as
follows:
Sec. 16.00 Clearing member reports.
(a) * * *
(5) For futures, the quantity of the commodity for which delivery
notices have been issued by the clearing organization of the contract
market and the quantity for which notices have been stopped during the
day covered by the report.
* * * * *
[[Page 24032]]
7. Section 16.01 is amended by revising the heading, removing
paragraphs (a)(5) and (a)(6) and redesignating paragraph (a)(7) as
(a)(5); by redesignating paragraph (c) as paragraph (b)(3); and by
adding a new paragraph (c) and revising paragraph (d) to read as
follows:
Sec. 16.01 Trading volume, open contracts, prices and critical dates.
* * * * *
(c) Critical dates. Each contract market shall report to the
Commission for each futures contract the first notice date and the last
trading date and for each option contract the expiration date in
accordance with paragraph (d) of this section.
(d) Reports to the Commission. Unless otherwise approved by the
Commission or its designee, contract markets shall submit the
information specified in paragraphs (a), (b) and (c) of this section as
follows:
(1) Using a format and coding structure approved in writing by the
Commission or its designee in both hard-copy form and on compatible
data processing media;
(2) When each such form of the data is first available but not
later than 7:00 a.m. on the business day following the day to which the
information pertains for the delta factor and settlement price and not
later than 3:00 p.m. for the remainder of the information; and
(3) Except for dial-up data transmission, at the regional office of
the Commission having local jurisdiction with respect to such contract
market.
8. Section 16.06 is revised to read as follows:
Sec. 16.06 Errors or omissions.
Contract markets shall file with the Commission on compatible data
processing media using a format and coding structure approved by the
Commission or its designee, corrections to errors or omissions in data
previously filed with the Commission pursuant to Secs. 16.00 and 16.01.
9. Section 16.07 is revised to read as follows:
Sec. 16.07 Delegation of authority to the Director of the Division of
Economic Analysis and the Executive Director.
The Commission hereby delegates, until the Commission orders
otherwise, the authority set forth in paragraph (a) of this section to
the Director of the Division of Economic Analysis and the authority set
forth in paragraph (b) of this section to the Executive Director to be
exercised by such director or by such other employee or employees of
such director as may be designated from time to time by the director.
The Director of the Division of Economic Analysis or the Executive
Director may submit to the Commission for its consideration any matter
which has been delegated in this paragraph. Nothing in this paragraph
prohibits the Commission, at its election, from exercising the
authority delegated in this paragraph.
(a) Pursuant to Secs. 16.00(b) and 16.01(d), the authority to
determine whether contract markets must submit data in machine-readable
form or hard-copy or both, and the time and Commission office at which
such data may be submitted where the director determines that a
contract market is unable to meet the requirements set forth in the
regulations.
(b) Pursuant to Secs. 16.00(b)(1), 16.01(d)(1), and 16.06, the
authority to approve the format and coding structure used by contract
markets.
PART 17--REPORTS BY FUTURES COMMISSION MERCHANTS, MEMBERS OF
CONTRACT MARKETS AND FOREIGN BROKERS
11. The authority citation for part 17 continues to read as
follows:
Authority: 7 U.S.C. 6a, 6c, 6d, 6f, 6g, 68, 7 and 12a unless
otherwise noted.
12. Section 17.00 is amended by revising paragraphs (a), (d), (e),
and (g) to read as follows:
Sec. 17.00 Information to be furnished by futures commission
merchants, clearing members and foreign brokers.
(a) Special Accounts--Reportable futures and options positions,
delivery notices and exchanges of futures for cash. Each futures
commission merchant, clearing member and foreign broker shall submit a
report to the Commission for each business day with respect to all
special accounts carried by the futures commission merchant, clearing
member or foreign broker, except for accounts carried on the books of
another futures commission merchant on a fully-disclosed basis. Except
as otherwise authorized by the Commission or its designee, such report
shall be made on compatible data processing media in accordance with
the format and coding provisions set forth in paragraph (g) of this
section. The report shall show each futures position, separately for
each contract market and for each future, and each put and call options
position separately for each contract market, expiration and strike
price in each special account as of the close of market on the day
covered by the report and, in addition, the quantity of exchanges of
futures for physicals and the number of delivery notices issued for
each such account by the clearing organization of a contract market and
the number stopped by the account.
(2) A report covering the first day upon which a special account is
no longer reportable shall also be filed showing the information
specified in paragraph (a)(1) of this section.
* * * * *
(d) Net positions. Futures commission merchants, clearing members
and foreign brokers shall report positions net long or short in each
future of a commodity and each strike price of a put or call option for
each expiration month in all special accounts, except as specified in
paragraph (e) of this section.
(e) Gross positions. In the following cases, the futures commission
merchant, clearing member or foreign broker shall report gross long and
short positions in each future of a commodity and each strike price of
a put or call option for each expiration month in all special accounts:
(1) Positions which are reported to an exchange or the
clearinghouse of an exchange on a gross basis, which the exchange uses
for calculating total open interest in a commodity;
(2) Positions in accounts owned or held jointly with another person
or persons;
(3) Positions in multiple accounts subject to trading control by
the same trader; and
(4) Positions in omnibus accounts.
* * * * *
(g) Media and file characteristics. (1) Except as otherwise
approved by the Commission or its designee, all required records shall
be submitted together in a single file. Each record will be 80
characters long. The specific record format is shown in the table
below:
Record Layout
----------------------------------------------------------------------------------------------------------------
Beginning column Length Type \1\ Name
----------------------------------------------------------------------------------------------------------------
1........................................ 2 AN Report Type.
3........................................ 3 AN Reporting Firm.
[[Page 24033]]
6........................................ 2 Reserved.
8........................................ 12 AN Account Number.
20....................................... 8 AN Report Date.
28....................................... 2 AN Exchange Code.
30....................................... 1 AN Put or Call.
31....................................... 5 AN Commodity Code (1).
36....................................... 8 AN Expiration Date (1).
44....................................... 7 S Strike Price.
51....................................... 1 AN Exercise Style.
52....................................... 7 N Long--Buy--Stopped.
59....................................... 7 N Short--Sell--Issued.
66....................................... 5 AN Commodity Code (2).
71....................................... 8 AN Expiration Date (2).
79....................................... 2 .................... Reserved.
80....................................... 1 AN Record Type.
----------------------------------------------------------------------------------------------------------------
\1\ AN--Alpha--numeric, N--Numeric, S--Signed numeric.
(2) Field definitions are as follows:
(i) Report Type. This report format will be used to report three
types of data: long and short futures and options positions, futures
delivery notices issued and stopped, and exchanges of futures for
physicals bought and sold. Valid values for the report type are "RP"
for reporting positions, "DN" for reporting notices, and "EP" for
reporting exchanges of futures for physicals.
(ii) Reporting Firm. The clearing member number assigned by an
exchange or clearing house to identify reporting firms. If a firm is
not a clearing member, a three-character alpha-numeric identifier
assigned by the Commission.
(iii) Account Number. A unique identifier assigned by the reporting
firm to each special account. The field is zero filled with account
number right-justified. Assignment of the account number is subject to
the provisions of Secs. 17.00 (b) and (c) and 17.01(a).
iv. Report Date. The format is YYYYMMDD, where YYYY is the year, MM
is the month, and DD is the day of the month.
(v) Exchange. This is a two-character field used to identify the
exchange on which a position is held. Valid values are as follows:
01 Chicago Board of Trade
02 Chicago Mercantile Exchange
03 MidAmerica Commodity Exchange
06 Coffee, Sugar and Cocoa Exchange
07 Comex Division of NYMEX
08 Kansas City Board of Trade
09 Minneapolis Grain Exchange
10 Philadelphia Board of Trade
12 New York Mercantile Exchange
13 New York Cotton Exchange
15 New York Futures Exchange
(vi) Valid values for this field are "C" for a call option and
"P" for a put option. For futures, the field is blank.
(vii) Commodity (1). An exchange-assigned commodity code for the
futures or options contract.
(viii) Expiration Date (1). The date format is YYYYMMDD and
represents the expiration date or delivery date of the reported futures
or options contract. For date-specific instruments such as flexible
products, the full date must be reported. For other options and
futures, this field is used to report the expiration year and month for
an options contract or a delivery year and month for a futures
contract. The day portion of the field for these contracts contains
spaces.
(ix) Strike Price. This is a signed numeric field for reporting
options strike prices. The strike prices should be right-justified and
the field zero-filled. Strike prices must be reported in the same
formats that are used by an exchange. For futures, the field is left
blank.
(x) Exercise Style. Valid values for this field are "A" for
American style options, i.e., those that can be exercised at any time
during the life of the options; and "E" for European, i.e., those
that can be exercised only at the end of an option's life. This field
is required only for flexible instruments or as otherwise specified by
the Commission.
(xi) Long-Buy-Stopped (Short-Sell-Issued). When report type is
"RP", report long (short) positions open at the end of a trading day.
When report is "DN", report delivery notices stopped (issued) on
behalf of the account. When report type is "EP", report purchases
(sales) of futures for cash for the account. Report all information in
contracts. Position data are reported on a net or gross basis in
accordance with paragraphs (e) and (d) of this section.
(xii) Commodity (2). The exchange assigned commodity code for a
futures contract or other instrument that a position is exercised into
from a date-specific or flexible option.
(xiii) Expiration Date (2). Similar to other dates, the format is
YYYYMMDD and represents the expiration date or delivery month and year
of the future or other instrument that a position is exercised into
from a date-specific or flexible option.
(xiv) Record Type (1). Record type is used to correct errors or
delete records that have previously been submitted. Valid values are
"A", "C", "D" or "blank". An A or "blank" is used in this
field for all new records. If the record corrects information for a
previously provided record, this field must contain a "C" or
"blank" and the record must contain all information on the previously
transmitted record. If the record deletes information on a previously
provided record, this field must contain a "D" and all information on
the previously transmitted record.
* * * * *
12. Section 17.02 is amended by revising paragraph (a) as follows:
Sec. 17.02 Place and time of filing reports.
* * * * *
(a) For data submitted on compatible data processing media:
(1) At the Chicago Regional Office for dial-up data transmission or
magnetic tape; and at the Chicago, New York or Kansas City Regional
Office for magnetic diskettes.
(2) Not later than 9 a.m. on the business day following that to
which the information pertains.
* * * * *
13. Section 17.03 is revised to read as follows:
[[Page 24034]]
Sec. 17.03 Delegation of authority to the Director of the Division of
Economic Analysis and to the Executive Director.
The Commission hereby delegates, until the Commission orders
otherwise, the authority set forth in paragraphs (a) and (b) of this
section to the Director of the Division of Economic Analysis and the
authority set forth in paragraph (c) of this section to the Executive
Director to be exercised by such Director or by such other employee or
employees of such Director as designated from time to time by the
Director. The Director of the Division of Economic Analysis or the
Executive Director may submit to the Commission for its consideration
any matter which has been delegated in this paragraph. Nothing in this
paragraph prohibits the Commission, at its election, from exercising
the authority delegated in this paragraph.
(a) Pursuant to Secs. 17.00 (a) and (h), the authority to determine
whether futures commission merchants, clearing members and foreign
brokers can report the information required under Rule 17.00(a) and
Rule 17.00(h) on series '01 forms or updated Commission supplied
computer printouts upon a determination by the Director that such
person technologically is unable to provide such information on
compatible data processing media.
(b) Pursuant to Sec. 17.02, the authority to instruct and/or to
approve the time and Commission office at which the information
required under Rules 17.00 and 17.01 must be submitted by futures
commission merchants, clearing members and foreign brokers provided
that such persons are unable to meet the requirements set forth in
Sec. 17.01; and
(c) Pursuant to Sec. 17.00(a), the authority to approve a format
and coding structure other than that set forth in Sec. 17.00(g).
14. Section 17.04 is amended by revising paragraph (a) and the
introductory text of paragraph (b) to read as follows:
Sec. 17.04 Reporting omnibus accounts to the carrying futures
commission merchant or foreign broker.
(a) Any futures commission merchant, clearing member or foreign
broker who establishes an omnibus account with another futures
commission merchant or foreign broker shall report to that futures
commission merchant or foreign broker the total open long positions and
the total open short positions in each future of a commodity and, for
commodity options transactions, the total open long put options, the
total open short put options, the total open long call options, and the
total open short call options for each commodity options expiration
date and each strike price in such account at the close of trading each
day. The information required by this section shall be reported in
sufficient time to enable the futures commission merchant or foreign
broker with whom the omnibus account is established to comply with part
17 of these regulations and reporting requirements established by the
contract markets.
(b) In determining open long and open short futures positions, and
open purchased long and open granted short option positions, in an
omnibus account for purposes of complying with Sec. 17.00(f),
Sec. 1.37(b) and Sec. 1.58 of this chapter, a futures commission
merchant, clearing member or foreign broker shall total the open long
positions of all traders and the open short positions of all traders in
each future of a commodity and, for commodity options transactions,
shall total the open long put options, the open short put options, the
open long call options, and the open short call options of all traders
for each commodity option expiration date and each strike price. The
futures commission merchant, clearing member or foreign broker shall,
if both open long and short positions in the same future are carried
for the same trader, compute open long or open short futures positions
as instructed below.
* * * * *
Issued in Washington, DC., April 25, 1997, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 97-11396 Filed 5-1-97; 8:45 am]
BILLING CODE 6351-01-M